South Korea's film industry is facing a serious crisis caused by the increasing proliferation of illegal Internet downloads and a "lack of creativity," a private researcher warned Monday.
Over the first six months of this year, homegrown accounted for 41.6 percent of the market, marking the lowest figure in six years, according to data released by Samsung Economic Research Institute.
In addition, the number of movie tickets sold during the January-June period fell 9.1 percent from a year ago, Samsung said. The institute is a research arm of Samsung Group, South Korea's biggest family-run industrial conglomerate.
Samsung attributed the decline to "a lack of creativity, sluggish exports and weak demand due to illegally-distributed movies on the Web."
Losses from piracy in South Korea are expected to account for 40 percent of the total revenue in the nation's film industry, Samsung said.
South Korea is one of the world's most wired nations with more than four-fifths of homes having high-speed Internet connections.
"After years of rapid growth, South Korea's movie industry is facing a structural problem in growth," Samsung said in the report.
South Korean movies have gained international fame since director Park Chan-wook's "Old Boy" won the Grand Prix at the 2004 Cannes Film Festival. Since then, local films became as popular in South Korea as Hollywood's biggest.
However, the South Korean government cut its quota for homegrown movies by half from early 2006, in one of pre-conditions to start negotiations for a free trade agreement with the United States. The two sides signed the free trade pact in June this year, after nearly a year of sometimes acrimonious negotiations.
The South Korean movie industry had long been helped by the so-called "screen quota" system, which set a mandatory number of days to screen domestically-produced films a year.